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A group of investors, including Debbie Chang, co-founder of Horizon Ventures, have exercised almost 5m common share purchase warrants on TAAT Lifestyle & Wellness stock at a strike price of C$2.00 each. This equates to total gross proceeds for TAAT of C$10m (£5.92m).

The original private placement from the group of investors took place in early October.

TAAT will be using the proceeds to enhance and accelerate the commercialisation efforts of TAAT, its flagship alternative to tobacco cigarettes, which is scheduled for launch in Ohio later this month. TAAT is a nicotine-free and tobacco-free alternative to tobacco cigarettes that have been developed to closely mimic the experience of smoking legacy tobacco products.

The cigarettes are produced using proprietary base material called Beyond Tobacco, which undergoes a 14-step production process to include a patent-pending refinement technique that causes the material to have a taste and smell similar to actual tobacco. TAAT is aiming itself squarely at the huge US tobacco market, starting with the state of Ohio.

The product is designed for existing smokers who have failed to kick their nicotine addiction, for example through nicotine patches or via vaping, but who want to part company with the drug. TAAT is being run by a team of ex-Philip Morris executives who have experience of new product development and distribution within the big tobacco industry.

“We thank the group for their continued support of TAAT as a vision to provide our consumers around the world a better choice without nicotine or tobacco,” said TAAT’s CEO, Setti Coscarella. “We are currently launching TAAT in Ohio where we have received considerable interest in the product, which will be available for purchase at retail in Q4 2020. With the funds from the voluntary exercise of the warrants issued as part of the placement, we anticipate we can strengthen current launch initiatives in Ohio and explore more ambitious plans for launching in other markets in the United States or internationally.”

Horizons Ventures is a Hong Kong-based venture capital firm, backed by tycoon Li Ka-shing, that has an established reputation of investing in disruptive technology start ups. Among the other successful ventures it has backed are Siri, Facebook, Skype, Spotify, Impossible Foods and Zoom Video Communications. Horizons was co-founded by Chang and Solina Chau in 2002. It set out to find high tech opportunities to invest in, and since then has built a considerable reputation in Asia and further afield for supporting industry-changing technology.

Horizons Ventures focuses on disruptive innovation, especially those companies that are small now but which have scope to be playing a bigger role in the future. It notably backed Skype in 2005, one year before eBay shelled out $2.5bn for the VoIP platform. It was also an early backer of Facebook, taking a piece of the action that would be valued at $1.5bn at today’s Facebook stock prices. More recently Horizons won renown for backing Zoom, making an early investment now valued at around $10bn.

It is no surprise that Family Capital this month called Horizons Ventures the Investment Office of the Year.

The Armchair Trader initiated coverage of TAAT Lifestyle & Wellness on 23 September. As of our 30 November report, TAAT stock was up 93%. The company is listed on both the Canadian Securities Exchange (CSE) and Frankfurt Stock Exchange.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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